| As new car inventory dried up, the market for used cars caught fire. Many dealerships began calling customers who had bought new cars a year or so earlier and delivered the good news… "It's worth more today than what you paid for it new! Would you like to sell it back to us?" How many times in your life had you ever heard that before? At the time, I was looking with my son, David, for a decent used car for him to take to college. The sticker prices were a joke. (Thirty-eight-thousand dollars for a four-year-old Subaru with a ton of miles on it, anyone?) A friend said, "What do you care, Alex? You've got plenty of money." I replied that if someone offered me a hamburger for $150, I wouldn't say no because I couldn't afford it. I'd pass because paying that much would be really dumb. As I told readers here in April of last year, "Buy into the current used car bubble and you're likely to take a beating when you turn around and sell in a few years." But what if you really needed transportation? I pointed out that there were three solutions. You could stick with the car you've got (for now). You could use public transportation. Or you could call Lyft or Uber. Otherwise, I warned, "when the used car market returns to earth, those losses are going to be fast and extraordinary... Cars have always been a depreciating asset. But that will be especially true over the next year or two." Let's fast forward to today. The Wall Street Journal ran an article two weeks ago entitled, "Millions of Drivers With Loans Are Now Going Underwater." The Journal said... The rapid decline in used-car prices is a financial risk for millions of drivers... Roughly a third of people who financed their vehicles have negative equity on their auto loans... the 19% drop in used car prices since their peak in 2022 means more cars are now worth less than the remaining balance on the car loan - and by larger amounts. According to Edmunds, borrowers today who have negative equity when they trade in owe an average of $6,458 more than what their car is worth. Approximately 22% of car owners owe $10,000 or more. It's obvious that used car prices were a bubble two years ago. But then, that's always the case in hindsight. Why do I bring this up now? After all, the used car bubble has already burst. Yet other bubbles haven't. Take a look at recent crypto prices. You think those prices can be justified for a piece of computer code that offers sky-high volatility, no tangible value, and virtually no utility? At investment conferences, I often ask attendees how many own or have owned Bitcoin. About three-quarters of the hands in the room go up. Then I ask, "And how many of you have ever used Bitcoin to buy or sell anything." Almost without exception, every hand in the room comes down. Is it not odd that a 15-year-old currency that is too slow, too cumbersome, too costly, too volatile - and not accepted by 99.99% of retailers - has skyrocketed as if it is somehow the solution to our biggest problems? Or perhaps you can explain why dogecoin - created as a joke and useful for absolutely nothing - has tripled over the past two months? A crypto bull scoffed at my skepticism the other day. "Bubbles," he laughed, "are for bathtubs." I agree. And bathtubs are where you take a bath. Good investing, Alex | 
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